Mad Money Recap

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Cramer's 'Mad Money' Recap June 26

TheStreet.com Staff

Click here for an archive of Cramer's "Mad Money" recaps.

On days like today, where the market is selling off, "We circle the wagons around the stuff we really like and we sell the stuff we don't," Jim Cramer told viewers of his "Mad Money" TV show Thursday.

"The big institutional investors have lost all confidence in the market," Cramer said. "They're not like you."

"You have to accept these declines," Cramer said. Investors should raise cash by selling marginal positions and buying stocks that they like, he said.

Cramer pointed out that today's selloff was indicative of "pin action" around themes that aren't working. He pointed out that the airlines can't buy planes, so investors are selling out of Boeing (BA Quote), which makes planes, and Honeywell (HON Quote), which supplies components for planes.

Similarly, he said, investors found out that General Motors (GM Quote) is running out of cash, so they sold out of Johnson Controls (JCI Quote), which makes car parts. Oracle (ORCL Quote), which supplies technology that is used by banks, similarly suffered when the financial sector went down, he said.

Research In Motion (RIMM Quote) reports a pretty darn good number," Cramer said. "If the best tech story isn't working, the market says 'who needs tech?'"

If a company needs money, if it supplies raw goods, it can't meet the estimates the market sets, Cramer said. "Only gold rallies," he said. "Gold rallies when nothing else is working."

"Right now I don't like the market other than a couple themes that I'm suggesting you circle the wagons around," Cramer said. "When even Conoco (COP Quote) and Rio (RIO Quote) and even the sacred Potash (POT Quote) go down, I need you to think opportunity, not enemy," he said.

"The only thing they buy is their own stock," he said. Part of the reason the selloff was so bad today was that companies are forbidden to buy stock at the end of the quarter, Cramer said.

Cramer told viewers to sell Citigroup (C Quote) Washington Mutual (WM Quote), Wachovia (WB Quote), AIG (AIG Quote) Fannie Mae (FNM Quote) and Freddie Mac. "You know I'm fearful about GM and Ford (F Quote)," he said. "You know I don't like retail homebuilders."

He said that investors should always have gold in a diversified portfolio.

Cramer said that the companies that will rally are companies that offer what's in short supply and companies that rise in a recession. He said stocks like Chesapeake Energy (CHK Quote), Schlumberger (SLB Quote), Heinz (HNZ Quote) and anything that supplies China with the copper, steel and coal that it needs is to be bought here.

"Raise cash; don't hold," Cramer told viewers. "We know that we ring registers here all the time. If you don't have cash, wait for things to go lower and then pick."

Another Play on Offshore Drilling

The future is offshore drilling, Cramer said. He said that politicians have blocked offshore drilling because historically it has polluted the coastlines. He said technological advancements have made drilling much cleaner in recent years.

"The stocks in play are cheaper, but the businesses are doing better," Cramer said. He said that he's been pointing viewers to cleaner-energy stocks for a while now. "Return to the long-term themes that are working when the market takes a huge hit like the one it took today," he said.

"You can buy good stocks for less money," Cramer said. "Tonight, our clean-drilling technology is drilling fluids. These fluids are the lifeblood of drilling." He said the fluids cool and lubricate drill bits and keep drill holes stable.

On that point, Cramer recommended Smith International(SII Quote) as a drilling-fluid play.

He said the fluids are profitable to sell and have been successful in highly regulated areas like Europe. He said Smith and two other companies make up a drilling fluid oligopoly, making the stock more attractive.

The company has also issued a 15-million buyback authorization, Cramer said, which means it's a great stock. "If you buy it now, you're getting it for less than you would have two days ago," Cramer said. He said the company is "thrice blessed," and part of one of the few bull markets right now.

Sell Block

Cramer took a minute to comment on Steve Rattner, who wrote an article criticizing Cramer in a Conde Nast publication. Cramer said that the Sell Block is for telling viewers to sell, and that Rattner got the show wrong.

"I'm telling you to sell all the time," Cramer said. "Last Friday during our game plan, I told you to pick up some Darden (DRI Quote)." After the stock's quick rise in the past week, Cramer said it's time to ring the register.

Cramer then reminded viewers that he had told them to avoid Nike (NKE Quote) and RIM ahead of their earnings. He recommended buying both now that they have gone down.

He reiterated previous bearish calls on ConAgra (CAG Quote) and RiteAid (RAD Quote).

Stay away from retailers, Cramer said. "As far as I'm concerned, this group cannot be owned until we start seeing actual store closings," he said. He warned viewers to stay away from J.C. Penney (JCP Quote), Sears (SHLD Quote), Kohl's (KSS Quote) and Dick's (DKS Quote).

Apogee's Rough Ride

Cramer recommended Apogee (APOG Quote) on April 28 as a green-building play. Apogee has fallen 16% since recommendation. He welcomed Russell Huffer, Apogee Chairman CEO, to the show to discuss his business.

Huffer said his business cuts the amount of heating and air conditioning required in buildings. He said that the quarter missed the Street expectation, but met the company's expectation. He said that the company is a long-term investment but his backlogs are bullish signs.

Cramer said investors should wait another quarter. "Right now we're in don't-buy mode," he said.

Lightning Round

Cramer was bullish on Tupperware (TUP Quote), Starbucks (SBUX Quote), Warren Resources (WRES Quote), Heinz, General Mills (GIS Quote), Frontline (FRO Quote)

He was bearish on Penn National Gaming (PENN Quote) and Hudson City Bancorp (HCBK Quote).

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

For more of Cramer's insights during the Lightning Round, click here.